Woolworths Limited v The Warehouse Group

JUDGMENT:

• 10 - IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 40243 of 2001

17 February 2003 Woolworths Limtied ACN 000 014 675 Applicant v The Warehouse Group (Australia) Pty Limited ACN 000 038 702 Respondent JUDGMENT Introduction 1 The respondent is the occupier of premises known as "The Warehouse", being units 5, 6 and 7 of a building at Nos. 824-850 Woodville Road, Villawood, being the land described as lot 3 in deposited plan 877672. The premises are part of a recently erected group of buildings in an industrial/warehousing development near Villawood railway station. 2 The applicant claims a declaration that the respondent is using the premises for a use that is prohibited under the relevant environmental planning instrument, Fairfield Local Environmental Plan 1994 ("the Fairfield LEP"). The applicant also claims a declaration that the respondent is using the premises in breach of condition 10 of a development consent granted by Fairfield City Council ("the council") on 24 July 2000. The applicant also seeks consequential relief restraining the respondent from using the premises for the display and sale of a range of general merchandise, generally in accordance with the current use thereof. 3 The questions for determination thus seem to be (i) whether the respondent's current use of the premises is permitted by the zoning; and (ii) whether the respondent's current use of the premises is contrary to the development consent. In answering these questions it is necessary to determine what is the nature or type of the respondent's business which is carried on in the premises. 4 In approaching these questions it is convenient to consider, firstly, what the zoning allows; secondly, the terms of the development consent; and thirdly, the actual nature or type of business being carried on by the respondent in the premises. Then, having determined the third question one should be able to see whether the use of the premises for that business infringes either the zoning, or the terms of the development consent, or both. 5 The land on which the premises are situated is within zone 4(c) Special Industrial under the Fairfield LEP. The development control table for the zone is as follows: Zone 4(c) Special Industrial

1. What are the objectives of the zone? The objectives of the zone are: (a) to encourage the establishment of a broad range of light industrial and warehouse activities and a limited range of business and retail activities compatible with nearby residential areas to generate employment and contribute to the economic development of the City of Fairfield, (b) to allow community uses to serve the needs of the nearby industrial work force, and (c) to allow retail development only: (i) where associated with, and ancillary to, light industrial purposes on the same land, (ii) for the display and sale of bulky goods, (iii) where it primarily serves the daily convenience needs of the local industrial work force, or (iv) for motor orientated activities, and only if the proposed development will not detrimentally affect the viability of any nearby business centre. 2 What is permitted without development consent? Nil. 3 What is permitted only with development consent? Any purpose other than a purpose included in item 4. 4. What is prohibited? Abattoirs, aged and disabled persons' housing, amusement parks, animal establishments, brothels, business premises, camping grounds and caravan parks, dwelling houses (except caretakers' dwelling houses), entertainment facilities, extractive industry, forestry, gaming taverns, generating works, group homes, hazardous industry, hazardous storage establishments, health consulting rooms, helicopter landing sites, heliports, home businesses, hospitals, hostels, hotels, industry, institutions, intensive agriculture, junkyards, medical centres, mines, multi-unit housing, offensive industry, offensive storage establishments, residential flat buildings, roadside stalls, sawmills, serviced apartments, shops (except take-away food shops), stock and sales yards, transport depots. 6 It can be seen that although shops (except take-away food shops) are prohibited within the zone, the development control table allows limited forms of retail development, including the display and sale of bulky goods. 7 On 24 July 2000, the council granted development consent for a use of the premises described as "Clints Warehouse Outlet". Condition 1 of the development consent states: "Development shall take place in accordance with the approved plans excepting as modified by the following conditions". Condition 10 of the development consent is as follows: 10. RESTRICTION ON USE The facility shall be operated in accordance with the following definition contained in Fairfield Local Environmental Plan 1994:- "Bulky goods salesroom or showroom" means a building or place used for the sale by retail or auction or the hire or display of items (whether goods or materials) which are of such a size, shape or weight as to require: (a) a large area for handling, storage or display; or (b) direct vehicular access to the site of the building or place by members of the public for the purpose of loading items into their vehicles after purchase or hire, but does not include a building or place used for the sale of foodstuffs or clothing". 8 The "approved plans" are attached to the Notice of Development Consent. They show an area of about 2,667 square metres within the here warehouse units to be used for the development. A floor plan shows the proposed layout within the premises, including the proposed placement of racking, shelving, tables and checkout counters on the floor. The floor plan shows what goods will be placed on or in particular racks, shelves, crates and tables. The goods thus identified are described as "furniture", "lamps", "manchester", "soft furnishings", "personal care" (which I understand to be shampoos etc), "sound and vision", "cards", "giftware", "clothing", "footwear", "confectionary", "grocery", "household", "kitchen", "electrical", "read and write" (which I understand to be stationary), "seasonal" (which I understand to be, for example, Easter eggs or Christmas decorations and the like, depending upon the time of the year), "craft", "flowers", "toys", "sporting goods", "camping outdoors", "auto", "hardware", "garden", "gallery" (which I understand to be pictures and frames) and "a tall watch showcase". There are nine checkout counters. 9 The connection between many of the goods identified on the floor plan and the display and sale of bulky goods seems to be somewhat tenuous. As noted above, however, although condition 1 of the development consent states that the development shall take place in accordance with the approved plans, the condition goes on to state, "excepting as modified by the following conditions". It follows that the floor plan is modified by, relevantly, condition 10, which restricts the use to a bulky goods salesroom and showroom as defined in the Fairfield LEP. 10 I now turn to the actual use being made of the premises. The evidence shows that there is a wide range of products and goods on display for sale, generally of the type identified in the floor plan attached to the Notice of Development Consent. The amount of space occupied by the various categories of goods does not, however, correspond to that shown on the floor plan. Many of the goods are small and easily portable and do not require a large area for handling, storage or display. Neither do such goods require direct vehicular access to the premises by members of the public for the purpose of loading items into their vehicles after purchase. The evidence, confirmed by a view of the premises taken with representatives of the parties, shows that such goods comprise the vast majority of goods on display. The total percentage of linear shelving occupied by truly bulky goods is only about 32 per cent. Almost 40 per cent of the display space is occupied by goods that could never be considered bulky. The remaining about 30 per cent of the display space is occupied by categories of goods of which some may be considered as bulky, such as sporting goods and camping goods. Apart from the furniture, however, most items of the latter category which were seen on display were not bulky. Furniture, which may be considered truly bulky, occupies only about 9.9 per cent of the display space. 11 Mr L M Fletcher, the town planner who gave evidence for the respondent, said that the vast majority of products on display are not bulky. The non-bulky goods include many convenience items of a kind that one would find in the places such as Villawood Shopping Centre. 12 Apart from Mr Fletcher, no one else gave evidence for the respondent. The Court does not thus have any explanation of the type of business being carried on in the premises. That can only be inferred from viewing the goods on display. In the light of the evidence I conclude the respondent's business is the selling of general merchandise, of which the sale of bulky goods is to be regarded as merely incidental. Although the respondent is displaying and selling bulk quantities of small products, that does not constitute the display or sale of bulky goods. The respondent's business seems to me to be the retailing of a range of general merchandise which involves the display of items in a bulk manner, where the goods require the convenience of a warehouse building to be handled, stored and displayed. The storage and display of goods in a bulk manner, however, does not come within the definition of "bulky goods salesroom or showroom". In another way, it seems clear to me that the vast majority of the goods are clearly not bulky goods, and those which are bulky goods comprise such a small proportion of the total merchandise on display for sale as to be merely incidental to the respondent's business, being the selling of general merchandise. At its highest the respondent's use of the premises might be described as a form of small discount department store. 13 In Sutherland Shire Council v Telope Pty Limited (1993) 85 LGERA 103, Gleeson CJ (Mahoney and Clark JJA concurring) discussed a definition of "bulky goods salesroom or showroom" in an environmental planning instrument, which definition is in the same terms as the definition in the Fairfield LEP. The Chief Justice said (at 106): The definition presently in question, in its practical application, turns upon either or both of two specified consequences which may result from the size, shape, or weight of goods being sold (or hired or displayed) at particular premises. One consequence is that there is a requirement for a large area for handling, storage or display. The other consequence is that there is a requirement for direct vehicular access to the site by members of the public for the purpose of loading items into their vehicles after purchase. That does not mean that the definition can only be satisfied if it can be shown that it would be impossible to carry on the business without either a large area for handling, storage or display or direct vehicular access for the purpose mentioned. Rather, what is meant is that either or both of those features should be dictated by the business end to which it is directed. In the present case, for example, all three showrooms are provided with direct vehicular access so that members of the public may load items into their vehicles after purchase. The question is not whether this is an absolute physical necessity. The question is whether the provision of such vehicular access is dictated by the nature of the business to be carried on in the premises is plainly adapted to the needs of the business, and is, therefore, relevantly required by the business. 14 In discussing the application of the definition the Chief Justice also said (at 107): Where a trader has for sale a range of goods, varying in size from small to large, and having available such a range is an ordinary incident of the type of business in question, it is normally inappropriate for a purpose such as the present to regard the trader as carrying on two independent activities one of selling small items and one of selling large items: cf Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157. Suppose, for example, that we were simply concerned with a shop that specialised in selling television sets. Some television sets are very bulky indeed, and others are small and portable. It may be assumed that it is an ordinary incident of such a business for a retailer to carry a comprehensive range of sizes. In such a case the carrying on of the business would dictate the keeping of a comprehensive range of goods, of all shapes and sizes, including a substantial number of large items, and the use of the premises would satisfy the definition for they would be used for the sale by retail of items of such a size, shape or weight, as to require (for example) direct vehicular access to the site by members of the public for the purpose of loading items into their vehicles after purchase. Provided a substantial number of such items were available for sale, so that their sale could not be regarded as merely incidental to the business, their availability would relevantly characterise the use of the premises. 15 In applying what is said by the Chief Justice in Telope to the present case, the focus must be on the nature or type of business in question. I have found that the nature or type of business is that of a retailer of general merchandise, or a form of small discount department store. I accept that the carrying on of such a business would dictate the keeping of a comprehensive range of goods of all shapes and sizes. In the present case, however, the number of items that could be described as bulky goods are such that their sale must be regarded as merely incidental to the business and their availability would not relevantly characterise the use of the premises. It follows that the use is a "shop". A shop is a prohibited use in the zone. The use is thus prohibited by the Fairfield LEP and is in breach of the Environmental Planning and Assessment Act 1979 ("the EP&A Act"). It is also in breach of condition 10 of the development consent. Discretionary considerations 16 Mr S D Rares SC, appearing (with him Mr M L Wright) for the respondent, made the following submissions: (i) the council has made no complaint about the manner in which the respondent's business is conducted; (ii) the respondent has made an application for modification of the development consent to reflect the present floor plan layout; (iii) the respondent has made an application for rezoning to allow the current use; (iv) the council in approving the development saw it as beneficial because it would act as an anchor for other businesses in the centre; (v) the development complies with objective 1(a) of the 4(c) Special Industrial zone (that is, to generate employment and contribute to the economic development of the City of Fairfield); (vi) there is no adverse impact on either the Villawood or Fairfield Shopping Centres; (vii) there is no complaint from any surrounding business or from local residents; (viii) there is no evidence of any harm being caused; (ix) the Court will generally be less willing to grant relief where the applicant is a private party and not the local council; (x) the applicant is a commercial competitor seeking to further its commercial advantage; and (xi) the granting of relief would disadvantage the public who both use and are employed by the respondent's business. 17 Mr M H Tobias QC, appearing (with him Ms J M Jagot) for the applicant, made the following submissions: (i) the respondent's use of the premises is prohibited by the zoning; (ii) there is a legislative purpose in upholding planning laws; (iii) denying relief in this case will amount to a de facto rezoning; (iv) the use is in clear competition with the Villawood Shopping Centre, which is struggling; (v) the use is also clearly in contravention of condition 10 of the development consent; (vi) if the use is condoned then, a sense of inequity could be felt by those who comply with the planning laws; (vii) it is inappropriate for an isolated retail centre to provide goods which may be available in a recognised centre; (vii) there is no evidence of the council's response to the application for rezoning; (viii) a refusal to grant relief would operate as a precedent, since the respondent has opened and intends to open similar stores elsewhere. 18 The principles governing the exercise of the Court's discretion are explained by Kirby P in Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335. Considerations described by Kirby P (at 339-340) which are of particular relevance in the present case are the facts that the relief sought is the enforcement of a public statute; the Act permits any person to bring proceedings in the Court for an order to remedy or restrain the breach (s 123 of the EP&A Act); there is a legislative purpose of upholding, in the normal case, the integrated and co-ordinated nature of planning law, in order to secure equal justice; and it is the intention of the Act that, normally, those concerned in development and the use of land will comply with the legislation. Moreover, as Kirby P explained, if unlawful exceptions and exemptions were condoned, the equal and orderly enforcement of the Act could be undermined; and a sense of inequity could then be felt by those who complied with the requirements of the Act. I find each of these considerations compelling in their application to the present case. 19 In a similar case, Woolworths Limited v Campbells Cash & Carry Pty Limited (1996) 92 LGERA 244, Cole JA said (at 261): In my opinion once it has been established that there are significant breaches of the planning consents, as has been established, the respondent should be restrained from continuing such breaches. Significant matters were put in opposition to that. The Court was reminded that the application for relief was brought by a competitor, Woolworths. … These matters are entitled to appropriate weight. However, the extent of unpermitted use is significant, as is the breach of the planning laws. The planning laws are proclaimed and enforced in the protection of the public interest: see Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 at 339; 63 LGRA 361 at 365 per Kirby P. Where significant breach continues, as here it does, strong countervailing circumstances would be required before a court should fail to enforce the planning consent. 20 I accept the submission of Mr Rares SC that where the application for the enforcement of the Act is made by the Attorney-General or a local council the Court will be slower to deny relief on discretionary grounds (Sedevcic, at 340, Associated Minerals Consolidated Limited v Wyong Shire Council [1974] 2 NSWLR 681 at 692, North Sydney Municipal Council v Ekstein (1985) 54 LGRA 440 at 450). I do not accept the submission, however, that there is an absence of harm arising from the use of the premises. The public detriment is not confined to physical or economic harm. It includes the broader interest in securing obedience to the planning laws. Unless restrained, a breach in one case leads to breaches in others and to a general feeling that the law is being ignored when breached by those who persistently flout it. In such a situation, the applicant in the present case, Woolworths Limited, would be justified in believing that whilst it must itself comply with the planning laws, others do not have to comply - there would no longer be a level playing field, upon which fair competition relies. 21 Neither do I regard the application for re-zoning as having any weight, since that application was made very recently and the attitude of the council to the application is not known. 22 All of the principles which I have described above point one way. Notwithstanding the submissions of Mr Rares, the Court should exercise its discretion by granting the relief which is sought by the applicant. 23 It follows that there should be a declaration that the respondent is using the premises for a prohibited use under the relevant zone in the Fairfield LEP, a further declaration that the respondent is using the premises in breach of condition 10 of the development consent, and an order restraining the respondent from so using the premises. 24 The parties have nevertheless asked that I set out my finding and conclusions, but refrain from making any formal declarations or orders and instead invite the parties to bring in short minutes of order to give effect to this judgment. Accordingly, the parties are directed to bring in short minutes of orders to give effect to this judgment, by arrangement with my associate. It would normally follow that the applicant is also entitled to an order for costs, but counsel have asked that I reserve that question. The exhibits may be returned.

                      I hereby certify that the preceding 24 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice Lloyd

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